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Cape Town - If oil continues to climb, South Africans should expect further pain at the fuel pumps in upcoming months, the Automobile Association (AA) said on Tuesday.
The association commented on unaudited month-end fuel price data released by the Central Energy Fund. In September petrol users could be hit the hardest, in its view, with a possible increase of 61 cents a litre, while diesel could climb by 46c, and illumination paraffin by almost 50c.
"The majority of the increase is attributable to strength in international petroleum prices, with just four cents of the hikes due to rand weakness," the AA said.
"International petroleum prices have remained on the plateau they reached at the beginning of August, and the average rand/dollar exchange rate has also shown little change."
According to Fanie Brink, an independent economist, the latest information from the Department of Energy released on Tuesday indicate that the price of gasoline 93 (ULP and LRP) in Gauteng could increase on Wednesday 6 September 2017 by 57.8c per litre and the price of diesel with a 0.005% sulphur content by 45.2c per litre.
The Brent crude oil price increased to an average of $51.70 a barrel over the past month compared to an average of $49.50 a barrel last month. This increase resulted in sharp rises in the average international price of gasoline by 54c per litre and an increase in the diesel price by 41.4c per litre.
The average rand/dollar exchange rate traded around R13.16 to the dollar in July and was slightly weaker August at R13.22 to the dollar. This resulted in a further increase of 3.8c per litre in both gasoline and diesel prices.
The price of petrol increased by 19c a litre at the beginning of August due to the weaker rand against the dollar and higher oil prices.
Earlier this month the AA predicted that the increase in illuminating paraffin in particular will have a strong negative effect on households which rely on this fuel for cooking, lighting and heating.
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